Is taking the risk on flipping houses worth it with our economy?

I am no stranger to home renovation, nor is my family, but recently my home(a.k.a. my hobby) was re-appraised with an incredible turn around. Who would not want to make more income - hence my question -

Is it worth taking the investment risk and start flipping more homes on the side? Do you foresee the market saturated with "wanna-be" home flippers looking for a quick buck (especially with Flipping shows on HGTV that make it all look so profitable and fun to newbee's)? Is our market right now to unstable to really depend on any real return, or worse, sitting on the property for too long to get a speedy profit?

I define flipping as contracting for a property and then assigning your contract position as buyer to another buyer (at a higher price) and walking away with your assignment fee. If you are knowledgeable in renovation, then you can do this even better than others, and it is less risky.

Inspect the house, negotiate to buy for a discount (after renovation value minus renovation costs minus rehabber's profit minus your carrying costs minus your profit minus contingency = offer price) and then find a buyer, who like yourself, likes to renovate and "flip houses". If you have found a good deal for a rehabber, they will want to take on your contract, and you walk away with your profit. Your profit is likely lower than the rehabber's, but you also have virtually NO risk. Just have a clause that lets you out if you find something you don't like (inspection is often enough) and your're fine.

In a "down" economy, this is a way to leverage your experience and still work within your risk tolerance. Plus, if you keep track of your buyer's progress and success, you may decide to keep the better deals you find for yourself and renovate and "flip" them yourself, once you've seen some others do it on deals you found.

Keep in mind.....shows like "FLIP THIS HOUSE" are not true flips. Rehabbing a house, if done right, can make a profit everytime. You just need to buy a house at the right price that needs some renovation. AN actually "FLIP" means to buy a house at a low price and resell it very quickly at a profit. So "Flip" and "Rehabbing" are getting intertwined here, and they are NOT the same thing. When you buy a house, fix it up for a few weeks and then sell it...that is NOT a true flip.
Having said that. Yes, I do think that these can be very profitible in our economy. There is ALOT of comptetion in most major markets though, so be wary of that. There can also be scam artists and what not, and I would be very carefull of houses that need TOO much repair, like faulty foundations, or alot of rot....things like that.

1. Flipping a more expensive house is riskier bec you will be putting more eggs in the basket. Expensive houses sit longer on the market- thus tying up your capital.

2. Location, location, location.

US economy is fine. Even if housing market slumps more. However, flipping at this time is too early. Wait until amateur flipper is out of market. Then, have fun. :)